Correlation Between Generation Bio and Eledon Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Generation Bio and Eledon Pharmaceuticals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Generation Bio and Eledon Pharmaceuticals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Generation Bio Co and Eledon Pharmaceuticals, you can compare the effects of market volatilities on Generation Bio and Eledon Pharmaceuticals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Generation Bio with a short position of Eledon Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Bio and Eledon Pharmaceuticals.
Diversification Opportunities for Generation Bio and Eledon Pharmaceuticals
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Generation and Eledon is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Generation Bio Co and Eledon Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eledon Pharmaceuticals and Generation Bio is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Generation Bio Co are associated (or correlated) with Eledon Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eledon Pharmaceuticals has no effect on the direction of Generation Bio i.e., Generation Bio and Eledon Pharmaceuticals go up and down completely randomly.
Pair Corralation between Generation Bio and Eledon Pharmaceuticals
Given the investment horizon of 90 days Generation Bio Co is expected to under-perform the Eledon Pharmaceuticals. In addition to that, Generation Bio is 1.19 times more volatile than Eledon Pharmaceuticals. It trades about -0.31 of its total potential returns per unit of risk. Eledon Pharmaceuticals is currently generating about -0.02 per unit of volatility. If you would invest 483.00 in Eledon Pharmaceuticals on September 3, 2024 and sell it today you would lose (17.00) from holding Eledon Pharmaceuticals or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Generation Bio Co vs. Eledon Pharmaceuticals
Performance |
| Timeline |
| Generation Bio |
| Eledon Pharmaceuticals |
Generation Bio and Eledon Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Generation Bio and Eledon Pharmaceuticals
The main advantage of trading using opposite Generation Bio and Eledon Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Generation Bio position performs unexpectedly, Eledon Pharmaceuticals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Eledon Pharmaceuticals will offset losses from the drop in Eledon Pharmaceuticals' long position.| Generation Bio vs. Monte Rosa Therapeutics | Generation Bio vs. Nkarta Inc | Generation Bio vs. Lyell Immunopharma | Generation Bio vs. Sana Biotechnology |
| Eledon Pharmaceuticals vs. DiaMedica Therapeutics | Eledon Pharmaceuticals vs. Lyra Therapeutics | Eledon Pharmaceuticals vs. Centessa Pharmaceuticals PLC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |